The Green IT Review

Friday, 27 May 2011

The UK government’s Department for Environment, Food and Rural affairs (Defra) has issued its consultation document asking for views on whether it should be mandatory for UK companies to report on their greenhouse gas (GHG) emissions.

The Climate Change Act 2008 requires the Government to make regulations by 6 April 2012 requiring the directors’ report of a company to include information about GHG emissions, or if not explain the reasons to Parliament. No decision has yet been made and the consultation is aimed at helping Ministers make up their minds (if they’re not made up already).

The consultation document includes four options:

• Enhanced voluntary reporting, i.e. not mandatory at all, but providing support and encouragement to voluntary reporting

• Mandate under Companies Act for all Quoted companies, i.e. reporting of GHG emissions in the director’s report from all quoted companies

• Mandate under Companies Act for all large companies. This option would require all large companies, public and private, as defined by the Companies Act to report on their GHG emissions in their director’s report. Between 17,000 and 31,000 large companies are expected to be included.

• Mandate under Companies Act for all companies whose UK electricity consumption exceeds a certain threshold. It’s proposed that this would be linked to the qualification criteria in the CRC Energy Efficiency Scheme. Under the CRC, organisations who are supplied with more than 6,000 MWh of qualifying electricity must register as participants. There are approximately 4,000 companies who come under the scheme. If the energy threshold was to be lowered – it could potentially cover up to around 15,000 companies.

Given the Government’s view on red tape – in which category much climate change regulations was initially placed – it’s important to make your views heard. Voluntary reporting should not be an option at this stage in the game, and linking mandatory reporting to the CRC might be an option if the future of the CRC itself was clearer.

Personally, I would like to see a combination of the second and third options, i.e. mandatory for all quoted companies AND all large companies (so that private companies and public bodies are also included). But let them know what you think.

Certainly mandatory reporting will help focus minds, but it’s only really bringing forward the inevitable - there’s not much excuse for not doing it now. There’s also a wide selection of carbon emissions management software to help.